HOW DOES THE DEMOCRATIC PLATFORM IMPACT SPORTS INDUSTRY?

Date: 9/26/12

SILVER SPRING, MD – September 19, 2012 – Political party platforms are a wish list and not always followed, but they are useful in providing an indication of what direction the political party is headed – from a policy perspective.

Bill Sells, SGMA’s vice president of government relations, reviewed the Democratic Party’s 32-page Platform and provides his analysis of what the Democrats plan to do should they take control of the Washington agenda after the November elections.

Overview

The Democratic vision for America going forward is a ‘mixed bag.’ Their commitment to improved education could benefit physical education although there is nothing specific on that front. The Democrats’ plan for health care is less friendly to the Personal Health Investment Today (PHIT) Act, as it is more focused on coverage for all Americans with additional requirements on employers. Their plan to raise taxes on anyone making more than $250,000 a year will not benefit the small business owner, but lowering corporate tax rates will help businesses overall. Increased access to foreign markets will create greater demand for industry products while stronger protection of intellectual property will help preserve brand equity.

Education

The Democratic Platform states: “We are committed to ensuring that every child in America has access to a world-class public education so we can out-educate the world…ensure that in every neighborhood in the country, children can benefit from high-quality educational opportunities.” Sells noted, “Quality education is always good, but with substantial evidence showing that P.E. contributes to higher academic performance, we would have liked to have seen some reference to the importance of P.E. in the Platform.”

Health Care

There is an emphasis on insurance coverage in the Democratic Platform: “We believe accessible, affordable, high-quality health care is part of the American promise, that Americans should have the security that comes with good health care, and that no one should go broke because they get sick.” Sells commented, “With health care costs increasing at an alarming rate, we need to consider ways to improve health and not just treat illness. The Platform is largely silent on health promotion. The focus on coverage over prevention creates a less favorable environment for physical activity initiatives like PHIT.”

Taxes

The Democrats’ tax Platform contains both good and bad news for the sports and fitness industry: “We are also committed to reforming the corporate tax code to lower tax rates for companies in the United States and we want to cut tax breaks for companies that are shipping jobs overseas and for special interests, and, instead, offer tax breaks to companies that are investing right here in the United States of America.” Sells observed, “Reforming the tax code to reduce corporate tax rates is positive, but with the industry manufacturing primarily overseas, eliminating existing tax breaks enjoyed by companies manufacturing overseas would increase taxes on most in the industry.”

The Democrats also state: “We are committed to extending the middle class tax cuts for the 98 percent of American families who make less than $250,000 a year, and we will not raise taxes on them.” According to Sells, “This is an ominous sign for family-owned small businesses as they would have less money to reinvest back into their business.”

China Currency

The Democratic Platform takes a less controversial approach on the Chinese currency issue: “Both publicly and privately, the President has made it clear to the Chinese government that it needs to take steps to appreciate its currency so that America is competing on a level playing field.” According to Sells, “Undervaluation of the Yuan is a serious problem, but resorting to retaliatory tariffs, as suggested in the GOP platform, should be a last resort. The Democratic strategy of pressuring the Chinese government in non-confrontational ways should be exhausted before resorting to countervailing duties on Chinese-made products.”

Trade

On trade, the Platform was positive: “We remain committed to finding more markets for American-made goods – including using the Trans-Pacific Partnership between the United States and eight countries in the Asia-Pacific region.”and “Because of the economic dynamism of the Asia-Pacific region, which is already home to more than half the global economy, expanding trade with that region is critical to creating jobs and opportunities for the American people.” Sells remarked, “The completion of the Trans-Pacific Partnership negotiations is a very positive step as it will open new markets to industry products and increase demand. It is especially important that we include firm intellectual property protections in a trade agreement with any country that historically has not been strong on enforcement of IP laws. Over the past four years, the Obama Administration has not initiated any new Free Trade negotiations. Going forward, the U.S. needs to pursue trade agreements more aggressively.”

Intellectual Property

The Democratic Party Platform is very similar on intellectual property: “The Administration is vigorously protecting U.S. intellectual property – our technology and creativity – at home and abroad through better enforcement and innovative approaches such as voluntary efforts by all parties to minimize infringement while supporting the free flow of information.” Sells cautioned, “Much like the GOP approach, this sounds great, but to truly protect IP Rights requires strong enforcement of IP laws by foreign governments, which has proved difficult in many developing countries.”

The Sporting Goods Manufacturers Association (SGMA), the #1 source for sport and fitness research, is the leading global trade association of manufacturers, retailers, and marketers in the sports products industry. SGMA helps lead the sports and fitness industries by fostering participation through research, thought leadership, product promotion, and public policy. More information about SGMA membership, SGMA Research, and SGMA's National Health Through Fitness Day can be found at www.SGMA.com